Mike and Suzanne Walker received a letter about a bill a discrepancy. Weeks
later, npower removed £25,300 from the couple’s account without warning

For almost seven years, Mike and Suzanne Walker dutifully paid their energy bills and provided regular meter readings.

The couple, both 65 and semi-retired, had in 2007 asked npower to supply gas and electricity to Langfield Manor, the guesthouse they run in Bude, Cornwall. They were perfect customers. Yet despite paying by direct debit and keeping close tabs on their meters, the couple received a letter from npower last October saying that there was a discrepancy in their bills. Weeks later, the energy giant removed £25,300 from the couple’s business account without warning.

It transpired that npower had, for the seven years, ignored the six-digit electricity reading sent by the Walkers, using only the first five digits to calculate bills.

Faced with a backdated charge that threatened their business, the guesthouse owners have managed to force npower to reduce the bill – but only to £14,120.

Last week, Telegraph Money initiated a drive to improve appalling customer service standards across the energy industry. Stories such as the Walkers’ – of small, family-run businesses sent shock bills for tens of thousands of pounds – are further evidence of deep-rooted failings.

Power providers are plagued by fundamental computer and system problems. But many unexpected bills arise from internal errors. Companies simply brush off customers with legitimate complaints, while claiming publicly to be “working hard” to improve in order to satisfy the regulator Ofgem.

Npower flouted clear rules around back-billing when sending Mr and Mrs Walker such a large demand. Firms are not allowed to back-bill business customers for more than six years if they have made an error, however npower has signed up to a voluntary code that reduces this to three years. It is 12 months for residential customers.

Mr Walker said: “When I called npower, they told me that our electricity meter had been misread since we opened the account. I had always sent in the correct six-digit readings, but npower said that when my readings reached their office, they ignored the last digit because they had five-digit readings showing on their system.”

When Mr Walker disputed the £25,000 bill, npower sent someone to cut off his power supply and debt collectors to retrieve the money. It even sent a court summons.

“The way npower has behaved is inexcusable. We have always acted in good faith and paid our bills on time. We have guests staying at the manor and it has been very embarrassing.”

The guesthouse trades for six months of the year, with an annual turnover of about £60,000. “We are both pensioners running a semi-retirement business that only produces money during the holiday season.We cannot afford to have £25,000 taken out of our account without warning,” Mr Walker said. “We should not be held responsible for npower’s inefficiency.”

Npower said its third party meter operator supplied the erroneous five-digit readings. It has now applied the three-year back billing code and reduced the debt by just over £11,000.

British Gas customer Guy Stanton (pictured below), 44, faced a similar battle. Mr Stanton leased a small bar in Leicester in 2007 with his brother Jonathan.

British Gas sent Guy Stanton a £36,000 bill

Mr Stanton, a services and IT manager, paid the bar’s monthly electricity bills by direct debit. “They were typically around £100. After two years, British Gas said we were not using as much electricity as anticipated and reduced them to about £80 a month,” he said.

But in November 2010, the pair received a bill from British Gas for £36,000.

“British Gas said they had under billed us for the past three years,” said Mr Stanton.

The brothers decided to sell the bar in 2011, but the dispute with British Gas is still unresolved. Mr Stanton has recently engaged solicitors and British Gas has threatened court proceedings to recover the debt, now standing at £19,975 after protracted negotiations.

“I have to decide whether to pay money I don’t think we owe or go to court and pay legal fees,” said Mr Stanton.

The bar’s electricity meter was replaced in October 2007. British Gas received meter readings that were one digit short. The supplier did not act on the discrepancy between these and professional readings for three years. A spokesman said: “In 2010, we reviewed Mr Stanton’s account as part of a routine audit. We have been in ongoing discussions since.”

Complaints by numbers

Complaints about all energy suppliers increased in the first three months of this year, figures published last week show (see table below). Complaints about npower and Scottish Power doubled during the time period, according to Citizens Advice.

The consumer body said complaints about npower rose from 306.8 for every 100,000 customers in the last quarter of last year to 592.4 between January and March – equivalent to one complaint for every 168.8 customers.

The charity’s latest complaints league table sees npower “firmly at rock bottom” in sixth place and Scottish Power in fifth place after both introduced new billing systems.

Energy complaints league table

Ranking

Supplier

Complaints / 100k customers

1

SSE

34.1

2

British Gas

75.4

3

E.ON

83.6

4

EDF

84.5

5

Scottish Power

197.7

6

npower

592.4

Average complaints

151

Complaints about Scottish Power increased from 100.5 per 100,000 customers to 197.7 in the first quarter.

Last month Ofgem warned npower to resolve its billing problems by the end of August or halt all telephone sales to new customers.

The regulator said npower had to meet monthly targets to cut the number of accounts affected by late billing or stop all proactive telesales activity.

Ofgem has also opened an investigation into npower’s “prolonged customer service failings”, the first under its new standards of conduct, which state that suppliers must treat consumers fairly.